Well, if you’re reading this you are.
Thought about what might happen if you need long term care?
Maybe you should.
According to a study by MetLife, long term care insurance (LTCi) is the fastest growing benefit being offered by Fortune 500 companies. Such plans are usually offered on a “voluntary” basis; that is, the employer offers the plan (underwritten by an insurance carrier) but doesn’t pay any of the premium.
Of course, folks who don’t work for “the big guys” buy these plans, as well. Either way, long term care insurance can be an effective way to minimize estate shrinkage, and to ensure that one has appropriate choices.
Now, did you know that one can pay for Long Term Care insurance (LTCi) out of one’s HSA? Yup, and when you do, Uncle Sam is subsidizing the premium. So there’s a double benefit at work: saving premiums on health insurance (purchasing a High Deductible Health Plan) and using some of those savings to fund insurance against a catastrophic long term care claim. Not bad for a plan that was supposed to destroy the health care system as we know it.
Why is this so important? Well, as Boomers age, the need for long term care increases, as does the cost of that care. According to accepted industry “common knowledge,” 1 out of every 3 retirees are going to need some form of long term care before they pass on. Of course, this doesn’t necessarily mean a long stay at a nursing home: it could mean adult day care, respite care, someone checking in once or thrice a week, whatever. Those (often big-ticket) items aren’t free. If there’s even a mild stroke, for example, it could take months for a full recovery.
Younger Boomers can also reap rewards from this technique: funneling those tax-advantaged HSA dollars into insurance against a future claim. One particularly intriguing technique now being used is for such folks to purchase limited-pay LTCi policies. These plans guarantee that after you’ve paid premiums for, say, 10 years, no more premiums are due, and the policy is fully “paid up.”
Henry Stern, LUTCF is an independent insurance agent in Dayton, OH. A licensed Continuing Education instructor for Ohio and Kentucky, he has well over 20 years of experience in “the biz.” He blogs every day (or so it seems) at InsureBlog.